Revisiting Markman-Cybor: Good Law But for How Long?

October 31, 2007 | By: Thomas F. Zuber

If the Federal Circuit’s recent opinions in Amgen Inc. v. Hoechst Marion Roussel, Inc., 469 F.3d 1039 (Fed. Cir. 2006), are any indication, the age of the Markman-Cybor regime may be coming to a close. Eight of the twelve judges expressed their concerns about the current status of claim construction, making a grant of certiorari likely. The key issue is whether and to what extent the trial court’s claim construction ruling is entitled to deference. Since Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (“Markman I”), and Cybor Corp. v. FAS Tech., Inc., 138 F.3d 1448 (Fed. Cir. 1998), the Federal Circuit has considered claim construction a purely legal issue subject to de novo review on appeal. There is a now a good chance that that rule will be revised.

The Amgen case was before the Federal Circuit on a combined petition for panel rehearing and rehearing en banc. Though the court denied both parts of the petition, eight judges filed a combined six separate opinions, with six judges dissenting from the denial of the petition for rehearing en banc and two concurring. Even the concurrences, however, expressed interest in revisiting portions of the Cybor claim construction rule should the proper circumstances present themselves.

The Federal Circuit first held that claim construction is purely a matter of law, subject to de novo review, in Markman I. The Supreme Court apparently agreed, though not necessarily unequivocally.[1] Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) (“Markman II”). Indeed, even after the Supreme Court’s ruling, Federal Circuit panels sometimes applied a clearly erroneous standard to what they considered factual findings in the course of a claim construction. Cybor, 138 F.3d at 1454. The Cybor court therefore reiterated its ruling “that the de novo standard of review as stated in Markman I remains good law.” Id. at 1455.

The Cybor court’s pronouncement did not quash the debate and dissent on the bench remained strong. By 2005, some panel members could no longer hide their unbridled disgust at “the futility, indeed the absurdity, of [the Federal Circuit’s] persistence in adhering to the falsehood that claim construction is a matter of law devoid of any factual component.” Phillips v. AWH Corp., 415 F.3d 1303, 1330 (Fed. Cir. 2005) (Mayer, J., dissenting). Judge Mayer was especially contemptuous of the Cybor regime as a representation of the court’s “quest to elevate [its] importance” rather than to create a consistent and reliable jurisprudence.He called the court delusional, id., and accused it of treating “the district court as an intake clerk, whose only role is to collect, shuffle and collate evidence.” Id. at 1332. Words like “erratic,” “internally contradictory,” “internal fracture,” “internal inconsistency,” and “instability,” to name a few, mark the opinions and commentaries of those who disagree with the current regimen.

The major arguments against the Markman-Cybor approach can be broadly grouped into 4 interrelated categories: (1) the district court is better suited to make the determination, in terms of resources and availability of evidence; (2) de novo review causes lack of certainty and predictability about appellate outcomes; (3) claim construction is inherently factual; and (4) the confusion over how, whether and when to rely on extrinsic evidence is troublesome and unnecessary. The dissenting opinions in Amgen touch on all of these; any one of them could be the basis for revisiting the Markman-Cybor standard.

The first argument says the trial court’s claim construction ruling should be entitled to deference because the trial court “has more tools, more time, and more direct contact with factual evidence than [the] appellate body.” Amgen, 469 F.3d at 1044 (Rader, J. dissenting). As Judge Rader explained in detail in Cybor:

Trial judges can spend hundreds of hours reading and rereading all kinds of source material, receiving tutorials on technology from leading scientists, formally questioning technical experts and testing their understanding against that of various experts, examining on site the operation of the principles of the claimed invention, and deliberating over the meaning of the claim language. If district judges are not satisfied with the proofs proffered by the parties, they are not bound to a prepared record but may compel additional presentations or even employ their own court-appointed expert.

An appellate court has none of these advantages. It cannot depart from the record of the trial proceedings. To properly marshal its resources, the appellate bench must enforce strict time and page limits in oral and written presentations. Moreover, a sterile written record can never convey all the nuances and intangibles of the decisional process.

Cybor, 138 F.3d at 1477-78 (Rader, J., dissenting). Trial judges have the experience, and trial court procedure is specifically designed, to make such determinations as, for example, who qualifies as an expert and assessment of customary usage of terms.

Not only is the district court better suited to make these determinations, but once the appellate court effectively usurps that function through de novo review, the process at the trial court level becomes a waste of time for litigants and the court. This is the second major complaint with the Cybor standard or review. “[T]he trial court’s early claim interpretation provides no early certainty at all, but merely opens the bidding. The meaning of a claim is not certain (and the parties are not prepared to settle) until nearly the last step in the process – decision by the Court of Appeals for the Federal Circuit.” Cybor, 138 F.3d at 1476 (Rader, J., dissenting). With reversal rates reported at anywhere from 30% to nearly 50%, parties have nothing to lose and possibly much to gain by appealing.

The Federal Circuit’s own cases have shown just how uncertain outcomes may be. In CVI/Beta Ventures, Inc. v. Tura LP, 112 F.3d 1146 (Fed. Cir. 1997), for example, the Federal Circuit reversed its own claim interpretation. The court first affirmed the Maryland district court’s claim interpretation. On the same patent, but in a separate infringement action, a New York district court applied the Federal Circuit’s claim interpretation. On appeal, the Federal Circuit held the New York district court erred in its claim construction. In other words, the Federal Circuit reversed itself. This seems like strong incentive for litigants to take their chances on appeal, thus prolonging the litigation, inundating the appellate court, and greatly increasing the costs of litigating patent infringement claims.

This inconsistency is especially problematic given the Federal Circuit’s “special obligation to provide predictability and consistency in patent adjudication, for [its] panel decisions are of nationwide effect; indeed, this obligation was a justification for the court’s holding, a decade ago, that the district court’s claim construction receives non-deferential review on appeal.” Amgen, 469 F.3d at 1042-43 (Newman, J., dissenting).

The fact-intensive nature of claim construction further supports the argument that the trial court’s ruling is entitled to deference. This third problem with Markman-Cybor revolves around the Federal Court’s insistence that claim construction is purely legal. It seems illogical, as well as contrary to the actual practice, to deny the factual underpinnings of claim construction. Questions of claim construction are not argued by reference to case law, but rather by testimony and documentary evidence, often days and weeks of it. These factual underpinnings result in highly specific determinations that will usually have no bearing on the interpretation of the same term in another patent case; this is a hallmark of factual, not legal, issues.

“When two experts testify differently as to the meaning of a technical term, and the court embraces the view of one, the other, or neither while construing a patent claim as a matter of law, the court has engaged in weighing evidence and making credibility determinations.” Lucas Aerospace, Ltd. V. Unison Indus., LP, 890 F. Supp. 329, 333-34 n.7 (D. Del. 1995). Under Cybor, however, district judges must claim that they have placed no reliance on expert testimony, that they have not made credibility determinations or weighed evidence; rather, they must indicate that this testimony did not aid them in construing the claim but only in understanding the technology. With this pretence, “the court knowingly enters a land of sophistry and fiction.” Id.

Thus, though the trial court must not admit to relying on extrinsic evidence to construe the claim – the language of the claim and specifications is all that may properly form the basis of the court’s ruling – there is no doubt that extrinsic evidence makes its way into the hearing. The Federal Circuit has struggled with formulating a rule to establish how much weight extrinsic evidence may carry and at what point in the determinations it may be considered. Judge Mayer, ever disdainful of the Cybor standard, noted that the Federal Circuit “continue[s] to struggle under this irrational and reckless regime, trying every alternative – dictionaries first, dictionaries second, never dictionaries, etc., etc., etc.” Phillips, 415 F.3d at 1330. Extrinsic evidence is important in patent cases, since patent documents are written by and for others in the field, often in highly technical terms; judges need help understanding the technology itself as well as the common usage by those of ordinary skill in the field.

The dissenting and concurring opinions in the recent Amgen case discuss each of these four issues; indeed, they practically beg the Supreme Court to grant certiorari, or at least beg litigants to present the right set of facts and procedural posture to allow the Federal Circuit to reexamine the Markman-Cybor rule. As Judge Plager in his concurring opinion in Cybor counseled:

[I]t may be some time before we have enough experience with “Markman hearings” and with appellate review under the new regime to draw any empirically sound conclusions. In such circumstances there is much to be said for refraining from premature and argumentative judgments about what it all means, and for allowing sufficient time to actually see how it works.

Cybor, 138 F.3d at 1463 (Plager, J., concurring). Having seen how it works, it looks like the Federal Circuit may now be ready for a change.

* The author, Thomas F. Zuber, is a partner of Zuber & Taillieu LLP, specializing in intellectual property transactions.

** This article is for informational purposes only. This article does not constitute legal advice and, in the absence of a fully executed retainer agreement, no attorney-client relationship exists between its reader and Zuber & Taillieu LLP or any of its attorneys. For more information, please read our disclaimer.

¹Markman II can be read as addressing solely the respective roles of the judge and jury at the trial level and not the relationship between the district courts and this court.” Cybor, 138 F.3d at 1456. Judges Rader and Mayer, along with various commentators, also maintain that, despite the Federal Circuit’s repeated insistence, the Supreme Court did not even necessarily hold that claim construction is a purely legal issue. See, e.g., Phillips, 415 F.3d at 1330 n.1 (Supreme Court held that, as policy matter, judge rather than jury should determine claim construction) (Mayer, J., dissenting); Cybor, 138 F.3d at 1473 (Supreme Court “repeatedly intimated that claim construction was not a purely legal matter”) (Rader, J., dissenting); Daniel Lueders, Holiday Banta & Quentin Cantrell, “Refining Cybor – Partial Deference for Claim Construction Analogous to Contractual ‘Usage of Trade’ Standard of Appellate Review,” Intellectual Property Today, Nov. 2006, at 17 (same).

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